Economy

The measures include utilising the government’s foreign exchange equalisation fund to meet shipbuilding companies’ FX hedging demands, thereby increasing dollar supply in the local market, minister Choo Kyung-ho said during a televised interview on Sunday.It is part of FX authorities’ efforts to ease volatility in the FX market, Choo said, in addition to a currency swap arrangement between the country’s central bank and a pension fund announced on Friday, as they are seeing the South Korean won recently weakening at a faster pace than most peers.On a question about the possibility of a currency swap deal between the Bank of Korea and the U.S. Federal Reserve, Choo said it would definitely be helpful for the local market, but is not necessary yet in the current market situation. More

STEPHENVILLE, Newfoundland (Reuters) – Powerful storm Fiona ripped into eastern Canada on Saturday with hurricane-force winds, forcing evacuations, knocking down trees and powerlines, and reducing many homes on the coast to “just a pile of rubble in the ocean.” The U.S. National Hurricane Center (NHC) said the center of the storm, downgraded to Post-Tropical Cyclone Fiona, was now in the Gulf of St. Lawrence and losing some steam. The NHC canceled hurricane and tropical storm warnings for the region.Port aux Basques, on the southwest tip of Newfoundland with a population of 4,067, bore the brunt of the storm’s rage.The mayor was forced to declare a state of emergency and evacuated parts of the town that suffered flooding and road washouts.Several homes and an apartment building were dragged out to sea, Rene Roy, editor-in-chief of Wreckhouse Weekly in Port aux Basques, told the Canadian Broadcasting Corp.”This is hands down the most terrifying thing I’ve ever seen in my life,” Roy said, describing many homes as “just a pile of rubble in the ocean right now.””There is an apartment building that’s literally gone. There are entire streets that are gone,” he added. Police are investigating whether a woman had been swept to sea, CBC reported.”We’ve gone through a very difficult morning,” Button said in a Facebook (NASDAQ:META) video, adding that the evacuations had been completed. “We’ll get through this. I promise you we will get through it.”Prime Minister Justin Trudeau met on Saturday morning with members of a government emergency response team, and later told reporters that the armed forces would be deployed to help with the clean up.”We’re seeing reports of significant damage in the region, and recovery is going to be a big effort,” Trudeau said. “We will be there to support every step of the way.”Trudeau had delayed his planned Saturday departure for Japan to attend the funeral of former Prime Minister Shinzo Abe, but said he now would no longer make the trip. Instead he said he would visit the storm-damaged region as soon as possible.Federal assistance has already been approved for Nova Scotia, Trudeau said, and more requests are expected. Fiona, which nearly a week ago battered Puerto Rico and other parts of the Caribbean, killed at least eight and knocked out power for virtually all of Puerto Rico’s 3.3 million people during a sweltering heat wave. Fiona made landfall between Canso and Guysborough, Nova Scotia, where the Canadian Hurricane Centre said it recorded what may have been the lowest barometric pressure of any storm to hit land in the country’s history.Ian Hubbard, meteorologist for the Canadian Hurricane Centre, told Reuters it appears Fiona lived up to expectations that it would be a “historical” storm.”It did look like it had the potential to break the all-time record in Canada, and it looks like it did,” he said. “We’re still not out of this yet.”Storms are not uncommon in the region and typically cross over rapidly, but Fiona is expected to impact a very large area.While scientists have not yet determined whether climate change influenced Fiona’s strength or behavior, there is strong evidence that these devastating storms are getting worse.HUNDREDS OF THOUSANDS WITHOUT POWERSome 69% of customers, or 360,720 were without power in Nova Scotia, and 95%, or more than 82,000, had lost power on Prince Edward Island, utility companies said. Police across the region reported multiple road closures. The region was also experiencing spotty mobile phone service. Mobile and Wifi provider Rogers (NYSE:ROG) Communications Inc said it was aware of outages caused by Fiona, and that crews would work to restore service “as quickly as possible.”PEI produces more than a fifth of Canada’s potatoes and the island’s potato farms, which are in harvest season, were likely to be impacted by the storm, Hubbard said.”This morning we all woke up to some very scary scenes, roads washed down, uprooted trees, mail boxes where they are not supposed to be,” Darlene Compton, deputy premier of PEI, told reporters, saying it had been a “nerve wracking” night.In Halifax, 11 boats sank at the Shearwater Yacht Club and four were grounded, said Elaine Keene, who has a boat at the club that escaped damage. Quebec Premier Francois Legault said no injuries or fatalities had been reported so far, and officials from both PEI and Nova Scotia said the same.The storm weakened somewhat as it traveled north. By 5 pm in Halifax (2100 GMT), it was over the Gulf of St. Lawrence about 80 miles (130 km) northwest of Port aux Basques, carrying maximum sustained winds of 70 miles per hour (110 kph), the NHC said. (Reporting Eric Martyn in Halifax and John Morris in Stephenville; Additional reporting by Ivelisse Rivera in San Juan, Puerto Rico, Ismail Shakil and Steve Scherer in Ottawa, and Denny Thomas in Toronto; Writing by Steve Scherer; Editing by Bill Berkrot, Diane Craft and Daniel Wallis) More

(Reuters) – Saudi Arabia will invest 40 billion riyals ($10.6 billion) in developing local infrastructure projects in 11 cities, state TV reported on Saturday citing the Ministry of Municipal and Rural Affairs and Housing.($1 = 3.7620 riyals) More

By Nell MackenzieLONDON (Reuters) – Hedge funds around the world fled positions in energy stocks, bonds and futures last week just in time to miss this week’s whipsaw moves in oil, according to data from two banks.Funds dropped their long and short positions in energy stocks, bonds and futures in the week ending Sept. 16 “more than any other time in recent months”, and more than any other sector of the economy in the last 20 days, according to notes by Morgan Stanley (NYSE:MS) and JP Morgan respectively. It could be a sign that hedge funds, which often discover trading ideas from market trends, are finding it too tough to bring in the kind of paydays they received from the surge in oil prices earlier this year. The move in positions in energy came just before oil jumped nearly 3% on Wednesday after Russian President Vladimir Putin announced an escalation of the war in Ukraine and then slid almost 4% on news that crude oil and gas supplies had risen in the United States.And on Friday, oil prices hit their lowest since January as recession fears gripped world markets. Brent crude is still up about 12% in the year to date.Hedge funds that trade with systematically programmed algorithms did not necessarily short the market but rather, vacated their positions because of a lack of any trend in the prices of oil, gas and other energy products, said David Gorton, the founder and chief investment officer of DG Partners, with $2.85 billion under management. “Our commodities exposure is the lowest it’s been in years. In June, markets reversed hard and commodities have been chopping down and sideways ever since. For a trend follower that’s a nightmare and why the model got out,” said Gorton. DG Partners is up 5.2% so far this month and 37% for the year, according to a source familiar with the matter. The momentum that fueled a stable upward rise in oil prices has changed, said another manager who oversees more than $100 billion and for compliance reasons wished to remain anonymous. More

DAKAR (Reuters) -A 48-hour strike by air traffic controllers in West and Central Africa has been suspended, their union said on Saturday.The strike, which started on Friday, has disrupted flights across the region and left hundreds of passengers stranded at airports on Saturday.The Union of Air Traffic Controllers’ Unions (USYCAA), which called the wildcat strike, said in a statement it decided to suspend its strike notice for 10 days immediately so as to allow for negotiations.”Air traffic services will be provided in all air spaces and airports managed by ASECNA from today Saturday, September 24, 2022 at 1200 GMT,” the statement said.The union said more than 700 air traffic controllers joined the strike to demand better working and pay conditions.The controllers work under the Agency for Aerial Navigation Safety in Africa and Madagascar (ASECNA) an 18-member state agency that manages air traffic over an area covering 16 million square km of airspace.Across the region, airport operations ground to a near halt as authorities tried to keep control towers operational for some flights.Hundreds of passengers were stranded at Douala International airport in Cameroon on Saturday morning, national television CRTV reported. National carrier Camair-Co said on Friday it had cancelled all its flights due to the strike.Nsoh Brinston, a stranded passenger who was due to fly to Kigali, Rwanda, said his flight has cancelled. “I will have to spend more than I intended due to the cancelled flight. I will have to do another COVID test which costs 30,000 CFA francs ($45),” he said. He would also have to find a place to spend the night.In Senegal, the airport departure board showed cancellations for flights operated by Brussels Airlines, Kenyan Airways and Emirates as passengers gathered to check if their flight was still on schedule. A group of students from Brazzaville, Republic of Congo, who were due to fly back home from Dakar said they were stuck at the airport because they could not afford the fare to the city, around 50 km from the airport. “We were supposed to board at 0900 GMT but were are still here,” one of the students said, requesting to remain anonymous. “We have been told the situation could be resolved by tomorrow.””I was supposed to leave at 1400 GMT. The flight was announced as scheduled but we have just been told that it has been cancelled,” said Maxine Compaore, who was supposed to fly to Abidjan, Ivory Coast.In Ivory Coast, eight flights scheduled to leave the commercial hub of Abidjan on Saturday were cancelled. ($1 = 666.7500 CFA francs) More

Executives at publicly traded US companies are becoming increasingly worried about the spectre of a further escalation of tensions over Taiwan, a major supplier of crucial components like semiconductors. The number of annual regulatory filings citing Taiwan as a risk factor has risen significantly over the past 12 months, according to Financial Times calculations based on Sentieo data. In March, a popular time for releasing so-called “10-k” reports, 116 companies mentioned Taiwan as a risk to their business, and the rolling 12-month average this month reached its highest level in at least 16 years. Technology companies represent the sector most concerned, with those in the semiconductor industry raising the loudest alarm. This is because Taiwan, which is the biggest producer of the most advanced chips, is rapidly becoming one of the world’s most dangerous geopolitical flashpoints. The fear is that in the event of a conflict with China, US firms will be unable to get the microchips needed to make smartphones, electric cars, new weapons, computers industrial machines, and even medical devices. Healthcare is the second most-concerned sector.“A ‘de facto’ blockade by Mainland China’s regular military exercises would create bottlenecks in fast-growing sectors dependent on semiconductors, such as high performance computing, internet of things, data centres and electric vehicles,” Alicia García-Herrero, chief Asia-Pacific economist at French bank Natixis, said.

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In a sign of the potentially wide-ranging corporate effects, a clutch of chief executives at big US banks told Congress this week that they would comply with any US government demand to pull out of China if Beijing were to attack Taiwan. The remarks came just days after US president Joe Biden said the US would defend Taiwan from a Chinese attack. The median US company had only had five days’ worth of chip inventories in 2021, down from 40 in 2019, according to a study the Department of Commerce.At the beginning of August, Biden signed the Chips Act, which will provide $280bn in funding to prop up and kick-start domestic semiconductor manufacturing and research.“The US will put more pressure on key suppliers to ban exports to China and develop production in its own market with industrial policy tools, such as the Chips Act and a push for friend-shoring,” García-Herrero said. More

“In the context of … high inflation and commodity prices, which has contributed to rising inflationary pressures in the country, the MPC approved for the bank to continue with gradual reduction of liquidity in September and October 2022,” the statement said. “The policy decision aims at reducing inflationary pressures, while safeguarding economic activities.”Inflation in Tanzania rose to 4.6% in August from 4.5% the previous month, while the country’s economy was facing a range of challenges, including weak global growth, high commodity prices, tight financial conditions and the recurrence of COVID-19 in some countries, the statement said. More

A rebellion against the status quo of the global financial architecture dating to the second world war gathered momentum in New York this week as developing world and climate leaders demanded action to help to them deal with climate change.In closed-door meetings on the sidelines of the UN General Assembly, and so-called climate week discussions alongside, wealthy countries were confronted by increasingly urgent questions about who pays for the catastrophic impact of hurricanes, floods and wildfires.Mia Mottley, the prime minister of Barbados, who has become the de facto leader of efforts by smaller, less wealthy nations to build a global coalition to secure funds to help tackle the ravages of climate change, called on Friday for “a new internationalism”.The postwar financial institutions established as a result of the Bretton Woods agreement in 1944, including the IMF and what became the World Bank Group, “no longer serve the purpose in the 21st century that they served in the 20th century”, Mottley said.The multipronged actions demanded from the IMF and World Bank included the redistribution of $100bn in special drawing rights, or extra foreign reserve assets; a requirement for the IMF to temporarily suspend interest surcharges for heavy borrowers in need of funds; and concessional funding to be provided for infrastructure related to climate resilience.The plans Mottley put forward included the issuance of $650bn of special drawing rights or other low-interest, long-term debt instruments to finance clean-energy development across the world. All major issuers of debt should “normalise” natural disaster and pandemic clauses in debt instruments to help borrowing countries better absorb the shocks, she said.Mottley was not the only leader to push for a rethink of how the world pays for the effects of climate change. Earlier in the week, fellow Caribbean Philip Davis, the prime minister of the Bahamas, said the IMF and World Bank should “revisit” their recommended debt-to-GDP ratios for borrowing countries “in the context of adaptation, mitigation, loss and damage, particularly, as a result of climate change”.Davis pointed out that “vulnerable countries” were “far above” the debt-to-GDP ratio recommended as sustainable by multilateral development banks, but they still had to pay to rebuild after natural disasters. Simon Stiell, newly appointed executive secretary of the UN Framework Convention on Climate Change, told the FT there was “growing consensus” that the so-called Bretton Woods structures were “appropriate for the postwar world” but now needed to be “reformed and adjusted”.

John Kerry, centre left, expressed frustration about the role of the banks that provide loans and grants to poorer countries dealing with climate change © Getty Images

Critically, US climate envoy John Kerry on Wednesday said he had also been pushing for reform of international financial institutions over a failure to marshal funds related to climate change. He said the need for an overhaul had been discussed at a leaders’ roundtable organised by the UN that day. The US is the largest shareholder in both the IMF and the World Bank, regarded as a laggard in financing climate change action under its president David Malpass, who drew fire this week after repeatedly failing to answer directly a question about his acceptance of climate change science.Kerry expressed frustration about the role of the institutions that provide loans and grants to poorer countries and are seen as crucial to distributing money to help limit global warming as developing economies grow.

The discussion comes as part of a fraught broader debate around so-called “loss and damage”. At the COP26 UN climate summit in Glasgow last year the rich countries that represent the bulk of historical global greenhouse gas emissions rejected a proposal by the world’s poorest countries to create a new facility to help pay for the damage from climate change.Vanessa Nakate, a Ugandan climate activist, told the Financial Times this week that there should be more finance available to help developing economies shift from fossil fuels for energy and adapt to climate change, and that it should take the form of a loss and damage facility. “International climate finance needs to help the global south, who do not have the resources to pay for the clean energy transition,” said Nakate. During the week, Denmark became the first country in the world to offer loss and damage compensation to countries affected by climate change, pledging around $13mn of support. UN secretary-general António Guterres has called for governments to impose a windfall tax on oil and gas company profits and redistribute the proceeds to countries harmed by climate change.Kristalina Georgieva, IMF managing director, said on Tuesday that demands from developing and climate-affected countries for developed countries to help pay for loss and damage were “very fair”. “I am following very closely the discussion on loss and damage,” said Georgieva. “It worries me that it seems to be still in a very early stage when we are only 50 days away from COP27 [the next UN climate summit].”Georgieva said the IMF was in a “desperate push to replenish” its Catastrophic Containment and Relief Trust after the Covid-19 pandemic had “sucked away” the trust’s money. “The question is how we can pay for institutions like ours to create this funding capacity,” Georgieva said. “When an innocent bystander is hit by exogenous shock, by external shock, we can then step forward and make the debt go away.” More